Consumer and Market Insights: Wine Market in Finland CS2033MF June 2015 1
Report scope This report brings together multiple data sources to provide a comprehensive overview of the Wine sector in Finland as part of our global coverage of the sector. This report draws on market data, analyzing value and volume data and category and channel distribution breakdown, also highlighting which categories are witnessing the biggest growth. Brand and Private Label analysis is also provided. Detailed packaging analysis is also provided, analyzing category trends and also packaging material and type. Market data coverage: The overall market value and volume data included in the report is for the period 2014-2019. Category coverage: This report provides information on three categories including Fortified Wine, Sparkling Wine and Still Wine. More extensive brand coverage: The report provides more extensive brand share coverage. Brand share data is also validated by inputs from industry experts. Distribution channel: The Distribution data included in the report covers 11 distribution channels including Cash & Carries & Warehouse Clubs, Dollar Stores, Variety Stores & General Merchandise Retailers, Hypermarkets & Supermarkets, Convenience Stores. Time period: The report provides overall market value and volume data, including category level data for the period 2009-2019. Distribution channel and brand share data is included for the year 2014. 6/1/2015 2 01/06/2015 6/1/2015 2
Table of Contents Country Context Market Overview Retail Landscape and Key Distribution Channels Packaging Brand Share Appendix 3
Increasing income and substantial young consumer base will drive growth in Finland GDP Per Capita (EUR) Consumer Price Index Annual growth (%) Population (Million) Annual Growth (%) Increasing GDP per capita will influence growth of the consumer packaged goods market in Finland. GDP Per Capita Population 38,000 37,000 36,000 35,000 34,000 33,000 32,000 2009 2010 2011 2012 2013 2014 6% 4% 2% 0% -2% -4% -6% -8% 6 4 2 0 2009 2010 2011 2012 2013 2014 0.6% 0.4% 0.2% GDP per capita growth rate declined during 2011 2013 but recovered in 2014 to total EUR37,214.7 in 2014. Population increased at a CAGR of 0.5% during 2009 2014. Its total population was 5.5 million in 2014. Consumer Price Index Age Profile 112 110 108 106 104 102 100 2009 2010 2011 2012 2013 2014 80+ 70-79 60-69 50-59 40-49 30-39 20-29 10-19 0-9 Consumer prices grew at a CAGR of 2.0% during 2009 2014 and reached 110.3 basis points in 2014. Finland has a substantial share of young population, with 24.5% of the population between the age group 15-34. 4
Table of Contents Country Context Market Overview Retail Landscape and Key Distribution Channels Packaging Brand Share Appendix 5
Finland s Wine market is forecast to grow at a higher rate in value terms during 2014-2019 compared to volume terms during 2009-2014 The Wine market in Finland is forecast to register higher growth in value terms during 2014-2019 compared to 2009-2014. The market grew at a CAGR of 3.6% in local currency terms during 2009-2014 and is forecast to grow at a CAGR of 3.8% during 2014-2019. The volume consumption of Wine grew at a CAGR of 1.1% during 2009-2014 and is forecast to register growth at a CAGR of 1.4% during 2014-2019. Market value of the Finland s Wine market, 2009-2019 Market volume of Finland s Wine market, (Millions of Litres), 2009-2019 EUR million US$ million 2009 657.2 912.9 2014 785.8 1042.6 58.9 62.1 66.4 2019 945.3 1,101.9 CAGR 2009-2014 CAGR 2014-2019 3.6% 2.7% 3.8% 1.1% 2009 2014 2019 CAGR 2009-2014 1.1% CAGR 2014-2019 1.4% 6
Finland s Wine market to witness moderate growth rate over the forecast period Growth Rate (%) Finland s Wine market is forecast to grow at a CAGR of 3.8% from EUR785.8 million (US$1,042.6 million) in 2014 to EUR945.3 million (US$1,101.9 million) in 2019. The market growth in US$ terms will be volatile during 2009-2014 due to fluctuating exchange rates. The growth rate in US$ terms is forecast to decline from a 2.7% CAGR during 2009-2014 to 1.1% during 2014-2019. The volume consumption is forecast to increase at a CAGR of 1.1% during 2014-2019 from 62.1 million Litres in 2014 to 66.4 million Litres in 2019. Per capita consumption has also increased from 11.0 in 2009 to 11.4 Litres in 2014. Market value (EUR million and US$ million) and volume growth of Wine market, 2009-2019 15% 10% Value(EUR m) Value (US$ m) 5% Volume (Ltr m) 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019-5% -10% -15% 7
Still Wine has the highest volume share in Finland s Wine market Market volume of the Finland s Wine market, (Millions of Litres), 2014, by category The Still Wine category accounted for 87.8% of Finland s Wine market volume followed by Sparkling Wine with a 8.0% share in 2014. 5.0 2.6 Still Wine The Sparkling Wine category is forecast to be the fastest growing category with a CAGR of 4.3% during 2014-2019. It is followed by Fortified Wine and Still Wine with a CAGR of 1.6% and 1.1% respectively. 54.5 Sparkling Wine Fortified Wine Market Volume, forecasted Compound Annual Growth Rate, 2014-2019 Market Volume (Ltr m) 2014 CAGR 2014-2019 Still Wine 54.5 1.1% Sparkling Wine 5.0 4.3% Fortified Wine 2.6 1.6% 8
The Sparkling Wine category will register fastest growth in value terms during 2014-2019 2014-2019 Category Value in EUR CAGR (%) The Still Wine category valued at EUR647.2 million (US$1,042.6 million) accounted for the largest value consumption with 82.4% of the Wine market share in 2014. Sparkling Wine category register the fastest CAGR of 6.7% in local currency terms, during 2014-2019 and will be followed by the Fortified Wine category with a CAGR of 6.1%. Market value of categories in Finland s Wine market 8% 7% 6% Still Wine 5% 4% Sparkling Wine 3% 2% 1% 0% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 2009 2014 Category Value in EUR CAGR (%) Fortified Wine Bubble size= 2014 Category Value (EUR million) 9
Still Wine is the largest category in value terms in Finland s Wine market Value (US$ Million) Value (US$ Million) Annual Growth (%) Annual Growth (%) Value (EUR Million) Value (EUR Million) Annual Growth (%) Annual Growth (%) Still Wine US$ Market value of categories in the Wine market Still Wine EUR 900 700 500 300 100-100 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value (US$) Annual Growth (%) 15% 10% 5% 0% -5% -10% -15% 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value(EUR) Annual Growth (%) 12% 7% 2% -3% The Still Wine category is forecast to grow at a CAGR of 3.6% during 2009-2019 from EUR528.9 million (US$734.8 million) in 2009 to EUR754.9 million (US$880.0 million) in 2019. White Wine which accounts for 50.6% share, is the largest segment in the Still Wine category. Sparkling Wine US$ Sparkling Wine EUR 200 20% 150 10% 150 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value (US$) Annual Growth (%) 10% 0% -10% -20% 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value(EUR) Annual Growth (%) 8% 6% 4% 2% 0% The Sparkling Wine category is forecast to grow at a CAGR of 6.3% during 2009-2019 from EUR77.7 million (US$107.9 million) in 2009 to EUR143.3 million (US$167.0 million) in 2019. Cava which accounts for 39.9% share is the largest segment in the Sparkling Wine category. 6/1/2015 10 01/06/2015 6/1/2015 10
Fortified Wine is the smallest category in value terms in Finland s Wine market Value (US$ Million) Annual Growth (%) Value (EUR Million) Annual Growth (%) Fortified Wine US$ Market value of categories in the Wine market Fortified Wine EUR 80 40% 60 20% 60 40 20 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value (US$) Annual Growth (%) 20% 0% -20% -40% 40 20 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value(EUR) Annual Growth (%) 10% 0% -10% -20% -30% The Fortified Wine category is forecast to grow at a CAGR of -0.7% during 2009-2019 from EUR50.6 million (US$70.2 million) in 2009 to EUR47.2 million (US$55.0 million) in 2019. Port is the largest segment in the Fortified Wine category with 8.2% share. 6/1/2015 11 01/06/2015 6/1/2015 11
The Sparkling Wine category will gain market share in value terms during 2014-2019 Winners Change in market share (in value terms) in the Wine market Losers Category Change in market share, 2014 2019 Category Change in market share, 2014 2019 1 Sparkling Wine 1 Still Wine 2.0% -2.5% The Sparkling Wine category is forecast to gain market share, growing from 13.2% in 2014 to 15.2% in 2019. The Still Wine category is forecast to lose market share, declining from 82.4% in 2014 to 79.9% in 2019. 1 Fortified Wine 0.5% The Fortified Wine category is forecast to gain market share, growing from 4.5% in 2014 to 5.0% in 2019. 12
Category level pricing Average category level prices (EUR) in Finland s Wine market, 2014 Category Average Price/ Ltr (EUR) 2014 Average Price/ Ltr (USD) 2014 Still Wine Overall 11.9 15.8 Sparkling Wine Overall 13.3 17.7 Fortified Wine Overall 20.9 27.7 6/1/2015 13 01/06/2015 6/1/2015 13
White wine is the largest segment by value in the Still Wine category Segment s share of the overall category by value and change in market share in Finland s Wine market, 2014 Category Segment Segment s Share, 2014 Segment s Share, 2019 Change 2014/2019 White Wine 50.6% 52.4% 1.9% Still Wine Red Wine 48.5% 46.5% -1.9% Rose Wine 1.0% 1.0% 0.1% Cava 39.9% 39.1% -0.8% Sparkling Wine Other Sparkling Wine 37.1% 33.1% -4.0% Champagne 23.0% 27.8% 4.8% Prosecco 0.0% 0.0% 0.0% Other Fortified Wine 74.7% 49.1% -25.6% Port 8.2% 8.5% 0.3% Fortified wine Vermouth 8.0% 3.4% -4.6% Sherry 7.7% 38.0% 30.4% Madeira 1.4% 0.9% -0.5% 6/1/2015 14 01/06/2015 6/1/2015 14
Table of Contents Country Context Market Overview Retail Landscape and Key Distribution Channels Packaging Brand Share Appendix 15
Profiles of selected leading Retailers in Finland Leading retailers in Finland Food retail market, 2013 Leading retailers, Finland Company Name S Group Overview S Group operates over 1000 stores in Finland, under the brand S-market supermarket. It runs Prisma, S-Market and Alepa chains. Kesko Food Kesko Food operates over 900 K-food stores. It runs through K- citymarket, K-supermarket and K-market chains. Suomen Lähikauppa Suomen Lähikauppa operates Siwa, Valintatalo stores and Euro-markets with over 665 stores across the country. Lidl Lidl is an international grocery chain headquartered in Germany. It operates 141 stores in Finland. 16
Food & Drinks Specialists is the leading distribution channel in Finland s Wine market Volume (Litres million) Leading distribution channels in Ukraine s Wine market, 2014 Leading distribution channels Overall Wines & Spirits Leading distribution channels Wine 100 80 Series1 4% 6% Food & Drinks Specialists 60 40 20 0 Food & Drinks Specialists Hypermarkets & Supermarkets Convenience Stores Others Series2 21% 69% Convenience Stores Hypermarkets & Supermarkets Others Wine as a percentage of overall Wines & Spirits: Wine accounted for 71.6% of Wines & Spirits sales in Finland in 2013. Food & Drinks Specialists, the leading distribution channel in Finland s market accounted for 95.0% of volume sales of Wines & Spirits in 2013. It is followed by Hypermarkets & Supermarkets and Convenience Stores with a 3.2% and 0.8% share respectively. Food & Drinks Specialists is the leading distribution channel in Finland s Wine market and it accounted for 69.3% of Wine distribution in 2014. It is followed by Convenience stores which has 21.3% share. Food & Drinks Specialists also registered fastest growth at a CAGR of 1.7% during 2011-2014. 17
Food & Drinks Specialists is the leading distribution channel in Finland s Wine market Leading distribution channels by category in the Wine market, 2014 Key distribution channels Still Wine Key distribution channels Sparkling Wine 6% 36% Food & Drinks Specialists 7% 35% Food & Drinks Specialists 24% Hypermarkets & Supermarkets 28% Hypermarkets & Supermarkets Convenience Stores Convenience Stores 34% Others 30% Others Key distribution channels Fortified Wine 6% 36% Food & Drinks Specialists 24% Hypermarkets & Supermarkets Convenience Stores Others 34% 18
Table of Contents Country Context Market Overview Retail Landscape and Key Distribution Channels Packaging Brand Share Appendix 19
Glass is predominantly used for wine packaging in Finland s Wine market Key Packaging Materials Overview of Finland s Wine market by type of packaging in 2014 Key Packaging Materials by category Glass 85.0% 3% 15.6% Glass Paper & Board Others Paper & Board 12.9% 82% 100% 100% Rigid Plastics 1.6% Still Wine Sparkling Wine Fortified Wine Glass was the most used packaging material in Finland s Wine market followed by Paper & Board with 12.9% share in 2014. Key Container Types In 2014, all categories in wine preferred Glass for packaging while 15.6% of Still Wine used Paper & Board for packaging. Key Container Types by category Bottle Bag-in-Box Others 11.8% 1.1% Bottle 2% Bag-in-Box 14% 100% 100% 86.6% Carton Bottle was the most commonly used container type which accounted for 86.6% of the market share in 2014. It was followed by Bag-in-Box with a share of 11.8%. 84% Still Wine Sparkling Wine Fortified Wine In 2014, All Wine products required Bottle containers while 14.3% of Still Wine which used Bag-In-Box for packaging.. 20
Stopper and Screw Top are the preferred closure types in Finland s Wine market Key Packaging Closures Overview of Finland s Wine market by packaging closures/outers used in 2014 Key Packaging Closures by category Dispenser Lever Closure Others 1 Stopper 2 Screw Top 59.0% 27.6% 3 Dispenser 12.3% 15% 84% 1% 100% 100% Still Wine Sparkling Wine Fortified Wine Stoppers were used as closures for the majority products and accounted for 59.0% market share in Finland s Wine market in 2014. Key Packaging Outers In 2014, 15.0% of Still Wine used Dispenser closure for packaging while only 1.3% of still Wine used Screw Top for packaging. * Data for Wine using Closures. Key Packaging Outers by category Box 1 Box 1.5% 9% 8% Fortified Wine Sparkling Wine In 2014, Box outers accounted for only 1.5% of market share. In 2014, 9.0% of Fortified Wine and 8.1% of Sparkling Wine required Box outers. * Data for Wine using outers. 21
Glass will continue to be the most used packaging material for Wine packaging through 2019 Million Units Million Units Million Units Million Units Key Packaging Materials Overview of Wine market by type of packaging in 2019 Key Container Types 50 40 30 20 10 0 Glass 2014 2019 Paper & Board 50 40 30 20 10 0 Bottle 2014 2019 Bag-in-Box Glass will grow at a CAGR of 0.5% during 2014-2019 to reach 41.3 million units in 2019. The use of Bottle will grow at a CAGR of 0.5% during 2014-2019 to reach 42.1 million units in 2019. Key Packaging Closures 40 30 20 10 0 Stopper 2014 2019 Screw Top Stopper Closure will grow at a CAGR of 0.5% during 2014-2019 to reach 28.6million units in 2019. Key Packaging Outers 0.8 0.6 0.4 0.2 0.0 2014 2019 Box The use of Box outer will grow at a CAGR of 0.8% during 2014-2019 to reach 0.7 million units in 2019. 22
Table of Contents Country Context Market Overview Retail Landscape and Key Distribution Channels Packaging Brand Share Appendix 23
Montesecondo is the leading brand in the Still Wine category Still Wine Brand share Leading brands - market share Sparkling Wine Brand share Leading brands - market share 8.2% 4.5% 4.5% 4.2% Montesecondo C.A.I. La Corte del Pozzo 7.6% 6.5% 5.8% 5.8% Freixenet - Carta Nevada Semi Seco Ridgeview Cuvee Licis Balma Others Others Fortified Wine Brand share Leading brands - market share 6.7% 4.8% 4.2% 1.1% Blossa Glögg Perinteinen Punaviiniglögi Chymos Mesiviini Marabello Others 24
Montesecondo is the leading brand in the Still Wine category.(continued) Brand Still Wine Brand shares in the Wine market, 2014 Share of category, 2014 Montesecondo 8.2% C.A.I. 4.5% La Corte del Pozzo 4.5% Licis 4.2% Anakena 4.2% Sonnentropfen 4.1% Lam 4.1% San Cassiano 3.8% Fossilium 3.7% Dürkheim Spielberg 3.7% Navaherreros 3.7% Cantocuerdas 3.6% Brand Still Wine Share of category, 2014 Gerümpel 3.3% Bonne Nouvelle 2.4% Cape Gold Chenin Blanc Gato Negro - Cabernet Sauvignon 1.8% 1.7% J.P Chenet 1.6% St. Elmo Village 1.6% Magyar Fehér Bor 1.6% Pearly Bay Cape White 1.5% Gato Negro - Sauvignon Blanc Viña Maipo - Cabernet Sauvignon Montalto Cataratto Viognier Espíritu De Chile - Cabernet Carmenère 1.5% 1.3% 1.0% 1.0% 25
Montesecondo is the leading brand in the Still Wine category.(continued) Brand Gallo Family Vineyards Zinfandel Still Wine Brand shares in the Wine market, 2014 Share of category, 2014 1.0% Tähtiglögi 1.0% Beringer 1.0% Two Oceans - Fresh & Fruity White 1.0% El Tiempo Blanco 0.9% Caballo De Mendoza 0.8% California Garden 0.8% Viña Maipo - Chardonnay 0.8% Primitivo Doppio Passo 0.8% Cono Sur 0.8% Hardys - Bin 343 Cabernet Shiraz Piqueras Syrah- Monastrell 0.8% 0.8% Brand Still Wine Share of category, 2014 Gato Negro - Chardonnay 0.8% Hardys - Vr Chardonnay 0.8% Paul Masson 0.7% Stony Cape Chenin Blanc 0.7% Two Oceans - Shiraz 0.7% Devil's Rock Riesling 0.7% Espíritu De Chile - Gewürztraminer Semillon 0.7% Blue Nun 0.6% Torres Sangre de Toro 0.6% Penfolds Kalimna Bin 28 Shiraz 0.6% Luna Negra - Chardonnay 0.6% Black Tower - Rivaner 0.6% 26
Montesecondo is the leading brand in the Still Wine category Brand Frontera Cabernet Sauvignon Still Wine Brand shares in the Wine market, 2014 Share of category, 2014 0.6% Frontera Chardonnay 0.6% Santa Helena - Varietal Chardonnay 0.5% Santa Helena - Merlot 0.5% Tarapacá - Santa Cecilia 0.5% Footmark Pinotage 0.5% Linderman's 0.5% Lindemans - Shiraz Cabernet 0.5% Luna Negra - Merlot 0.5% Espíritu De Chile - Shiraz Cabernet Espíritu De Argentina - Shiraz Malbec 0.4% 0.4% Brand Still Wine Share of category, 2014 Hehkuviini 0.4% Nederburg 0.4% Raimat Abadia Cabernet Sauvignon 0.3% Pebble Park Chardonnay 0.3% Wolf Blass Red Label Shiraz Cabernet Kumala Cabernet Sauvignon-Shiraz 0.3% 0.3% Gambina 0.3% Rosemount Shiraz 0.2% Others 0.8% Palacio Del Conde Tempranillo 0.4% 27
Freixenet- Carta Nevada Semi Seco is the leading brand in the Sparkling Wine category Sparkling Wine Brand shares in the Wine market, 2014 Sparkling Wine Brand Freixenet - Carta Nevada Semi Seco Share of category, 2014 7.6% Ridgeview 6.5% Cuvee 5.8% Balma 5.8% Vall Dolina 5.5% Maset 5.4% Codorníu Classico Seco 5.2% Asti Gancia 5.2% Freixenet - Cordon Negro Brut 4.9% Quetschenbaum 4.3% Alko - Ballet Demi-Sec Carte Noire 4.1% Coralba Spumante 3.6% Brand Share of category, 2014 Bernard Massard 3.1% Pol Rémy Demi-Sec 3.0% Yellowglen Pink 2.9% Castellblanch - Rosado Semi Seco Carat 2.5% Light Live 1.7% Festillant 1.2% Anna de Codorníu Brut 1.0% Martini Spumante Brut 0.7% Törley Talisman 0.6% Moët & Chandon 0.6% Jeanmaire Cuvée Brut 0.5% Segura Viudas Lavit Brut Nature 0.4% 28
Blossa Glogg is the leading brand in the Fortified Wine category Brand Sparkling Wine Brand shares in the Wine market, 2014 Share of category, 2014 Ballet Demi 0.3% Elysée No 1 0.3% Tosti Asti Dolce 0.2% Henkell Trocken 0.2% Others 17.2% Brand Fortified Wine Share of category, 2014 Blossa Glögg 6.7% Perinteinen Punaviiniglögi 4.8% Chymos Mesiviini 4.2% Marabello 1.1% Vermouth Bianco 0.8% Tio Pepe 0.3% Sandeman Vintage Porto 0.3% Others 81.8% 29
Table of Contents Country Context Market Overview Retail Landscape and Key Distribution Channels Packaging Brand Share Appendix 30
Appendix - Country Context Exchange Rates: US$-EUR, 2009 2019 Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 EUR-US$ Exchange Rate (Annual Average) 0.7 0.8 0.7 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 GDP Per Capita (EUR) Year 2009 2010 2011 2012 2013 2014 GDP Per Capita (EUR) 33,907.7 34,884.9 36,536.6 36,769.5 37,015.2 37,214.7 Population Year 2009 2010 2011 2012 2013 2014 Total (Millions) 5.3 5.4 5.4 5.4 5.4 5.5 Annual Growth (%) 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% Consumer Price Index Year 2009 2010 2011 2012 2013 2014 Index 100 101 105 108 109 110 Age Profile (Millions of Persons) Age Group Total (Millions) 0.6 0.6 0.7 0.7 0.7 0.8 0.8 0.4 0.3 31
Appendix Sector Overview Finland s Wines & Spirits Sales Distribution (US$ Million) 2010 2013 Food & Drinks Specialists 83.4 81.6 Hypermarkets & Supermarkets 2.9 2.8 On Trade 0.8 0.7 Others 0.9 0.8 Finland s Wine Market Value by Category (US$ Million and EUR Million) Category 2014 Value (US$ Million) 2009 2014 CAGR (%) 2014 2019 CAGR (%) 2014 Value (EUR Million) 2009 2014 CAGR (%) 2014 2019 CAGR (%) Still Wine 858.6 3.2% 0.5% 647.2 4.1% 3.1% Sparkling Wine 137.5 5.0% 4.0% 103.6 5.9% 6.7% Fortified Wine 46.5-7.9% 3.4% 35.1-7.1% 6.1% 32
Appendix Category Data Still Wine Market Value 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value (US$ Million) 734.8 718.0 808.4 779.2 831.9 858.6 752.4 777.5 810.2 845.7 880.0 Growth (%) -2.7% -2.3% 12.6% -3.6% 6.8% 3.2% -12.4% 3.3% 4.2% 4.4% 4.0% Value (EUR Million) 528.9 542.1 581.5 606.5 626.6 647.2 668.2 689.7 711.8 734.4 754.9 Growth (%) 2.6% 2.5% 7.3% 4.3% 3.3% 3.3% 3.3% 3.2% 3.2% 3.2% 2.8% Sparkling Wine Market Value 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value (US$ Million) 107.9 110.4 123.4 123.1 128.8 137.5 124.6 133.2 143.9 155.7 167.0 Growth (%) -1.3% 2.3% 11.8% -0.3% 4.6% 6.8% -9.4% 6.9% 8.0% 8.3% 7.2% Value (EUR Million) 77.7 83.4 88.8 95.8 97.0 103.6 110.6 118.2 126.4 135.2 143.3 Growth (%) 4.1% 7.3% 6.5% 7.9% 1.2% 6.9% 6.8% 6.8% 6.9% 7.0% 5.9% Fortified Wine Market Value 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Value (US$ Million) 70.2 56.9 55.0 48.8 47.5 46.5 39.2 39.7 41.8 46.1 55.0 Growth (%) -31.0% -19.0% -3.3% -11.3% -2.6% -2.0% -15.7% 1.3% 5.1% 10.5% 19.1% Value (EUR Million) 50.6 43.0 39.6 38.0 35.8 35.1 34.8 35.3 36.7 40.1 47.2 Growth (%) -27.2% -15.0% -7.9% -4.1% -5.8% -2.0% -0.7% 1.2% 4.1% 9.2% 17.7% 33
Appendix Segment data Market Share by Segment by Value Category Segment Segment s Share, 2014 Segment s Share, 2019 White Wine 50.6% 52.4% Still Wine Red Wine 48.5% 46.5% Rose Wine 1.0% 1.0% Cava 39.9% 39.1% Sparkling Wine Other Sparkling Wine 37.1% 33.1% Champagne 23.0% 27.8% Prosecco 0.0% 0.0% Other Fortified Wine 74.7% 49.1% Port 8.2% 8.5% Fortified wine Vermouth 8.0% 3.4% Sherry 7.7% 38.0% Madeira 1.4% 0.9% 6/1/2015 34 01/06/2015 6/1/2015 34
Appendix Packaging Data Packaging Materials in 2014 Vs. 2019 (Million Units) Packaging Material 2014 2019 Glass 40.3 41.3 Paper & Board 6.1 6.7 Rigid Plastics 0.8 0.8 Flexible Packaging 0.2 0.3 Container Types in 2014 Vs. 2019 (Million Units) Container Types 2014 2019 Bottle 41.0 42.1 Bag-in-Box 5.6 6.1 Carton 0.5 0.6 Pouch 0.2 0.3 35
Appendix Packaging Data Closure Types in 2014 Vs. 2019 (Million Units) Closure Types 2014 2019 Stopper 28.0 28.6 Screw Top 13.1 13.4 Dispenser 5.8 6.3 Lever Closure 0.5 0.6 Outer Types in 2014 Vs. 2019 (Million Units) Outer Types 2014 2019 None 46.7 48.3 Box 0.7 0.7 36
Category definitions Category Definition Fortified Wine Fortified wine is wine to which extra manufactured alcohol has been added, the most common being brandy. Includes Madeira, Port, Sherry, Vermouth and other fortified wines. Fortified means that it has an alcohol content by volume (ABV) of between 14% and 20%. Sparkling Wine A wine made effervescent by carbon dioxide gas, introduced artificially or produced naturally by secondary fermentation includes champagne and cava. Still Wine During fermentation the yeasts consume the sugar and turn it into alcohol, a byproduct of this process is carbon dioxide. If the carbon dioxide is allowed to escape the wine is referred to as still. Includes all white, red and rosé still wines. 37
Segment definitions Category Fortified Wine Sparkling Wine Definition Madeira Other Fortified Wine Port Sherry Vermouth Cava Champagne Prosecco Madeira is a fortified wine made in the Madeira Islands. The wine is produced in a variety of styles ranging from dry wines which can be consumed on their own as an aperitif, to sweet wines more usually consumed with dessert. ABV of 15-18%. All fortified wine (ABV between 14-20%) other than Madeira, Port, Sherry and Vermouth Port wine (also known simply as Port) is a fortified wine from the Douro Valley in the northern provinces of Portugal. It is typically a sweet red wine, but also comes in dry, semi-dry and white varieties. ABV of around 16-20% Sherry is a fortified wine made from white grapes that are grown near the town of Jerez, Spain. The wine is fortified with neutral spirits and aged for at least four years in a series of barrels. It is typically made from the Palomino grape and classified into various styles; Fino ( dry ) Amontillado ( sweet ) and Oloroso ( cream ). ABV of 17-22% Vermouth is a fortified wine flavored with aromatic herbs and spices ("aromatized" in the trade) using closely guarded recipes (trade secrets). Some of the herbs and spices used may include cardamom, cinnamon, marjoram and chamomile. ABV of 15-18% Cava (Catalan pronunciation) is a Spanish sparkling wine of Denominación de Origen (DO) status, most of which is produced in Catalonia. It may be white (blanc) or rosé (rosat). The macabeu, parellada and xarel lo are the most popular and traditional grape varieties for producing cava. It is produced using the 'methode traditionelle' (natural carbonation via a second fermentation in the bottle). Sparkling wine produced in the Champagne region of France, using Chardonnay, Pinot Noir and Pinot Meunier grapes. A white sparkling wine associated with celebration. Champagne is naturally carbonated via a second fermentation in the bottle. A pale cream or straw color. (9-16% ABV) Prosecco is an Italian white sparkling wine made from Glera grapes. Other Sparkling Wine All sparkling wines sold that do not meet the definitions of either Cava or Champagne categories 38
Segment definitions Category Definition Red Wine Red wine is a type of wine made from dark-coloured (black) grape varieties with the skin left in during fermentation (excludes red fortified wines and red vermouth) Still Wine Rosè A rosé (rosado in Spanish-speaking countries or rosato in Italy) is a type of wine that incorporates some of the color from the grape skins, but not enough to qualify it as a red wine. White Wine Still wine produced from black or white grapes with the skin removed before fermentation (excludes white fortified wines and white vermouth). Includes Petite Arvine, Chardonnay, Sauvignon Blanc, Pinot Gris, Riesling, Semillon, Moscato 39
Channel definitions Channel Hypermarkets & Supermarkets Convenience Stores Food & Drinks Specialists Definition Hypermarkets/mass merchandisers include all sales through retailers with floor area over 2,500 sq m that carry full lines of both grocery and general merchandise (e.g. Wal-Mart). Supermarkets include all sales through retailers with a floor area of 300 sq. m. -2,500 sq. m. that offer a wide, departmentalized range of groceries, and may carry some general merchandise lines (e.g. Sainsbury's, Kroger). It also includes hard grocery discounters such as Wal-Mart. Includes all sales through stores of an area generally less than 300 sq m, that specialize in a limited range of food & grocery products designed primarily for consumers with top-up shopping needs. Also includes sales in retail outlets attached to gas stations, where fuel is the main revenue driver, kiosks, and newsstands. This also includes small independent retailers, particularly those present in countries such as China and India. Includes bakers, butchers, delicatessens, drinks specialists, fishmongers, greengrocers, Food & drinks only stores, and single category stores (e.g. stores selling only cheese, or only olives, or only honey, or only Confectionery products) Example: Amul Dairy shops In India. On-trade Sales through consumer foodservice outlets include cafés/bars, FSR (full-service restaurants), fast food, self-service cafeterias and street stalls/kiosks. Sales to semi captive foodservice outlets are also which include the outlets located in leisure, travel and retail environments. Other Retailers Includes Dollar Stores, Variety Stores & General Merchandise Retailers, Cash & Carries & Warehouse Clubs, Department Stores, Drug stores & Pharmacies, eretailers, Vending Machines and other generalist retail channels not included in the categories above (e.g. market traders, charity stores, student union stores, direct sales, and Duty Free shops). 40
Methodology This report features data derived from market data. Market Data In order to create the data for all reports in this series and ensure their robustness, a comprehensive and empirically robust research methodology has been adopted. This combines both a large-scale program of industry research with the results of extensive primary industry interviewing and calling. Furthermore, all definitions are standardized across products and countries to ensure comparability. The two main research methods, secondary research and primary research (the program of interviewing industry contacts), are brought together and because both sets of research processes have been designed in conjunction with each other they can be combined and consolidated into the final, integrated data sets. The secondary research process involves covering publicly available sources, trade associations, specialist databases, company annual reports, and industry publications. Primary research involves a major program of interviewing leading industry executives for each category covered in each country all with local country experts; typically brand, product and marketing managers for major brands within each country. These processes help analysts in capturing both qualitative and quantitative information about the market. The final stage of the process is the triangulation of inputs obtained from all the research methods with the analyst s own understanding of the market in order to finalize the data. Once the data is finalized, it goes through various top level quality checks prior to publishing. 41
About Canadean About Canadean Canadean is a full-service business information provider with in-house market research capabilities. We specialize in analysis across the Consumer Markets Value Chain, covering suppliers, producers, distribution and consumers. Canadean s dedicated research and analysis teams consist of experienced professionals with an industry background in marketing, market research, consulting and advanced statistical expertise. We offer value-added market research, insight and strategic analysis and our products help companies to make better, more informed, strategic and tactical sales and marketing decisions. Canadean s areas of expertise include online research, qualitative and quantitative research, industry analysis, custom approaches, and actionable insights. In addition Canadean has built a network of consultants and specialist researchers across more than 60 countries, each with in-depth industry experience and expertise enabling us to conduct unique and insightful research via our trusted business communities. Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Canadean. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Canadean delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such, Canadean can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. 42